Instagram Tests Direct Response Ads in Stories

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SumUp was one of the first to test DR campaigns in Instagram Stories.
SumUp was one of the first to test DR campaigns in Instagram Stories. Credit: Instagram

Instagram is testing direct response ads inside its Stories section, allowing sign-up and app-install pitches, among other salesy formats.

On Wednesday, Instagram served an ad in Stories from SumUp, an e-payment device company, that prompted people to swipe up to sign up for its service.

Until now, Instagram Stories ads have only offered broad "reach" objectives for branding purposes and not more targeted marketing goals. It's experimenting with ads encouraging app installation, sign-ups on websites and other goals that are already part of the main Instagram ad offering, according to people familiar with the testing. Instagram Stories will eventually accomodate all the same marketing objectives that are available from buying ads in the main feed, they said.

Stories let users share vertical video clips that stay up for 24 hours before disappearing.

Instagram confirmed that it is testing direct-response ads in Stories but declined to elaborate or name other advertisers trying the format.

Direct-response ad formats give Instagram another category in which to challenge Snapchat. Snapchat invented Stories and popularized vertical video ads.

Snapchat also went after the app-install and direct-response advertisers by developing ad technology that lets them target consumers effectively and other tools they need.

One top DR advertiser, speaking on condition of anonymity, said app-install ads have been a hit on Snapchat, but now the company would give Instagram another look.

"We haven't been able to make Instagram work for us at all from a DR perspective," the advertiser said. "But we will test Stories."

Stories, on either platform, could prove to be more effective channels for direct response than some standard digital formats because ads in Stories are considered more enticing. They take up the full screen, proponents say, drawing viewers in and encouraging better creative executions than display ads that are easier to ignore.

Instagram -- and its parent Facebook -- has been challenging Snapchat at every new product turn, in an effort to dominate the younger startup before it can establish itself further with advertisers and consumers.

Instagram copied Snapchat's Stories last August.

In March, Instagram started selling sponsored videos in between Stories, a similar ad format to the one Snapchat developed. Instagram already let brands and publishers embed links in their unpaid stories.

Earlier this week, Snapchat and Instagram dueled over features inside their stories sections. Snapchat created Custom Stories, which lets groups contribute to the same video story. Instagram delivered a new way to search its stories by hashtag and location, similar to something Snapchat allows already.

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CORRECTION: An earlier version of this article erroneously said Instagram created Custom Stories. That feature was created by Snapchat.

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